China's land ministry says to continue targeted policies

SHANGHAI (Reuters) - China will continue its targeted policies to address demand and supply in the property sector and stay on track with land supply plans, the Ministry of Land and Resources said on Saturday.

The government faces the challenge of controlling rising home prices in the largest cities where prices are too expensive for many residents, while also encouraging sales and supporting prices in smaller cities that face a glut of unsold homes.

In the second half of the year it would focus on its “one city, one strategy” approach to key cities, the ministry said in a statement on its website.

It would push property developers to start and complete projects according to their contracts, narrow gaps in supply and demand in the market, and promote the healthy and stable development of the property market. It also said that it would check that land transfer contracts are being followed.

In the first half of the year, the ministry inspected cities’ land supply plans. It said it requires those that aren’t on track to make adjustments to make sure they meet targets for land supply.

Prices of new homes in China grew 12.4 percent in 2016, the fastest rate since 2011. A Reuters poll on Aug. 29 showed that China’s home prices are likely to rise more than previously estimated despite a flurry of government curbs to crack down on speculation.

On Friday, Xu Zhong, head of the central bank’s research bureau, wrote in a central bank publication that China’s property market has become a major source of financial risk.

“Real estate has serious problems such as crowding out investment (from other areas), impeding the transformation and healthy development of the economy, and is also an important source of financial risks,” Xu wrote.

China wants to keep the property market stable ahead of a once-in-five-years Communist Party congress next month.